Tax Update Blog: Permalink

« Previous · Tax Update Blog Home · Next »

LIFE IMITATES TAX UPDATE

March 13, 2003

Last week we said one warning sign of an "abusive" tax preparer was

"He hands you your return and says 'you didn't get this here.'"

In affirming the conviction of a preparer for tax fraud last week, the Eighth Circuit noted:

"Mr. and Mrs. Rogers also advised clients that, if asked by the IRS who prepared the tax returns, they should respond that they prepared the returns themselves."

What got the preparers in so much trouble?

"With (the preparer's) assistance, the McNairs filed an amended tax return for 1991; on this return they deducted as business expenses a purely personal trip to Las Vegas to get married and costs associated with the care of Mrs. McNair's sick dog. On their 1994 tax return, they again deducted the dog-related expenses, as well as thousands of dollars in auto and travel costs to and from a 'rental home' that was in fact in their front yard and occupied by Mrs. McNair's mother. "

Their secret?

"(The preparer) also told the prospective clients that (he) knew of 'secret' provisions hidden in the Internal Revenue Code, provisions accountants and attorneys were not trained in, and that his method was not taught at business schools such as Harvard and Stanford."

Well, they were certainly right about that last part...

      Bookmark: del.icio.us • Digg • reddit